LCG, just like many other firms in the market, has not weathered the tough 2012 well and will be posting a loss in the region of £0.2m (before tax) on a revenue of £28.6m. The group begins an aggressive cost cutting campaign (trying to reduce 15% of costs). Interesting to note that the group is dealing with a large number of complaints which it’s handling through FOS and last quarter settled with 37% of them by paying £0.7m and now it reports that it paid even more. It’s not known what the complaints are about.
London Capital Group Holdings plc, gives the following trading update in respect of the financial year ended 31 December 2012. LCG will publish its results for the year ended 31 December 2012 on 20 February 2013.
Following its trading update on 23 October 2012, the Group has, as expected, continued to experience suppressed trading volumes in the fourth quarter due to low market volatility. Group revenue for the year was £28.6m (2011: £39.0m) and adjusted loss before tax is expected to be in the region of £0.2m (stated before share based payment expense and previously reported exceptional items of £1.1m). Adjusted loss before tax includes £0.5m of exceptional legal costs including Financial Ombudsman Service (FOS) claims and losses from overseas subsidiaries of £1.2m.
In October 2012 the Board announced an efficiency review and a review of its overseas subsidiaries. During the fourth quarter the Board completed a comprehensive review and has identified 15% of potential savings that can be achieved across the Group’s cost base. The Board intends to implement the changes necessary to bring about these savings by the end of 2013 with associated implementation costs being incurred this year.
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Whilst trading volumes and active clients remain subdued, client funds on deposit and client numbers remain strong, leaving the Group well positioned for when market activity increases. The Group remains well capitalised with net cash resources and amounts due from brokers amounting to £20.3m as at 31 December 2012.
LCG also announces that Rachel Woodford, Chief Operating Officer, has notified the Board of her intention to resign to pursue other interests. Ms Woodford’s six month notice period expires in July 2013; in the meantime she will continue to carry out her executive duties in order to ensure a smooth transition of responsibilities.
The Board would like to take this opportunity to thank Rachel for all her hard work over the last nine years in building and developing the business.
For further information, please contact: www.londoncapitalgroup.com